Entrepreneurship, Second Edition

14.2. A Model of Driving Forces of Growth

Chapter 2 offers a model describing three driving forces that must be in balance during the startup process: the entrepreneur, the opportunity, and resources. In the growth stage, these three driving forces shift to leadership, the opportunity domain, and organizational resources and capabilities, as Figure 14.2 illustrates. While the business plan is at the core of Chapter 2's model, the growth model has execution as its core and fourth driving force. These forces must all come into balance and remain so during the growth phase.

Both the startup and the growth models are affected by uncertainty and environmental conditions. Whether at startup or in its growth phase, an organization is unable to predict many events, such as a competitor introducing a superior product soon after launch or customers adopting a product much more slowly than anticipated. Environmental conditions, such as economic cycles, the regulatory environment, and technological change, can also affect a venture's viability and success. In all phases of its life, the organization will need to balance the driving forces amid conditions it cannot control.

Stakeholders have the largest impact on a firm's growth potential. Stakeholders are those having a stake in the venture's success, like investors, customers, suppliers, and employees. As a new venture grows, it accumulates a range of insiders and outsiders who become increasingly dependent on the firm and exert heavy influence ...